Dakotafest panelists tout potential of Aberdeen plant

August 19, 2011|By Austin Kaus

MITCHELL, Aug. 19 — Walt Bones was sitting in a New Zealand airport recently when he ordered a hamburger from McDonald’s. When he opened the packaging, he found a picture of a rancher who provided the beef for the burger. "If McDonald’s can put a face on a hamburger in New Zealand, think of the value of having your face on a good quality product coming from South Dakota," Bones told attendees Thursday during the final day of Dakotafest, an agricultural trade show near Mitchell. Bones, the South Dakota secretary of agriculture, was part of a five-member panel that discussed growing the cattle industry in South Dakota. The consensus was that the meatpacking plant under construction at Aberdeen will mean good things for South Dakota beef producers. "I think the new plant in Aberdeen will be an excellent addition to the beef industry here," said Keith Underwood, an assistant professor who specializes in meat science at South Dakota State University in Brookings. "This provides an awesome opportunity in the state." The Northern Beef Packers plant is under construction on the southwest side of Aberdeen. The plant, which David Palmer, CEO and president of NBP, estimated Thursday would be open in November, will employ approximately 560 people initially and grow to 660 in the next five years. Palmer estimates the $100 million plant’s economic impact will create 7,500 new jobs in the agricultural and retail industries. A study conducted by the Aberdeen Development Corporation estimated the plant would provide more than $10 billion worth of economic growth in northeast South Dakota and the surrounding states in the first five years of operation, Palmer said, although a study conducted by SDSU estimated the impact at approximately $8 billion. "$8 billion is fine with us, too," Palmer said with a smile. Palmer estimates the plant’s annual revenue will be $500 million and that the plant will make annual cattle purchases of $480 million and provide approximately $19 million in payroll and benefits. The plant will also mean that beef will finally be able to be sold as South Dakota Certified, since the program requires that cattle be not only born and raised in South Dakota but processed here as well. Palmer estimates that the plant will initially process 1,500 cattle a day and increase to 1,800 over five years. The plant is capable of adding a second shift, but there are currently no plans to do so. "We’re going to be focused on running a little slower than other plants to have the quality and workmanship ... and appeal to the customer base that we’re going to be appealing to," Palmer said. Palmer said the plant would only kill young feeder cattle. Ideally, the cattle would be between 1,300 and 1,350 pounds and younger than 30 months of age, although younger is better since cattle can’t be older than 24 months to qualify for the South Dakota Certified Beef program. Cattle exported to Japan cannot be older than 20 months of age, Palmer said. Bones said approximately 1.6 million calves are raised in the state each year. "Unfortunately, most of those leave the state when it comes time to harvest," Bones said. Audience member Ken Olsen said the plant could mean big things for the state. "The economic blast from this plant is going to put us in the black for many years to come if it’s handled properly," Olsen said. Before the forum closed, an Iowa farmer asked what could be done to change an anti-livestock sentiment like he’s witnessed in Lincoln County. Bones said it is important for counties to have local control over whether or not confinement units and other large-scale operations are placed in the county, but said it is extremely frustrating for livestock producers to "look like they’re being welcomed with open arms" only to arrive at a county commission meeting where vocal citizens speak out against the units. "I’ve seen county commissions totally flip over because of the peer pressure that’s out there. That’s not a good thing," Bones said. "You have, in my opinion, a vocal minority that comes before the board and flips that county commission over." Bones added the time for public input is when the comprehensive plan is being put together. Other participants on the panel were John Demmers, of NBP, and Matt Dierson, SDSU ag economist.